SECTION 7.404. Transition Period for Stipulated Premium Insurance Companies

(a) A stipulated premium insurance company shall comply with §7.402 of this subchapter (relating to Risk-Based Capital and Surplus Requirements for Insurers and HMOs).

(b) A stipulated premium insurance company that on December 31, 2009, had less than the minimum amount of capital and surplus required for a newly incorporated company under the Insurance Code §884.054 must:

(1) not later than December 31, 2010, have increased the amount of its capital and surplus by at least 10 percent of the difference between the amount of minimum capital and surplus required for a newly incorporated company under the Insurance Code §884.054(a) and (c) and the amount of the company's capital and surplus on December 31, 2009;

(2) not later than December 31, 2011, have increased the amount of its capital and surplus by at least 20 percent of the difference between the amount of minimum capital and surplus required for a newly incorporated company under §884.054(a) and (c) and the amount of the company's capital and surplus on December 31, 2009;

(3) not later than December 31, 2012, have increased the amount of its capital and surplus by at least 30 percent of the difference between the amount of minimum capital and surplus required for a newly incorporated company under §884.054 and the amount of the company's capital and surplus on December 31, 2009;

(4) not later than December 31, 2013, have increased the amount of its capital and surplus by at least 40 percent of the difference between the amount of minimum capital and surplus required for a newly incorporated company under §884.054 and the amount of the company's capital and surplus on December 31, 2009;

(5) not later than December 31, 2014, have increased the amount of its capital and surplus by at least 50 percent of the difference between the amount of minimum capital and surplus required for a newly incorporated company under §884.054 and the amount of the company's capital and surplus on December 31, 2009;

(6) not later than December 31, 2015, have increased the amount of its capital and surplus by at least 60 percent of the difference between the amount of minimum capital and surplus required for a newly incorporated company under §884.054 and the amount of the company's capital and surplus on December 31, 2009;

(7) not later than December 31, 2016, have increased the amount of its capital and surplus by at least 70 percent of the difference between the amount of minimum capital and surplus required for a newly incorporated company under §884.054 and the amount of the company's capital and surplus on December 31, 2009;

(8) not later than December 31, 2017, have increased the amount of its capital and surplus by at least 80 percent of the difference between the amount of minimum capital and surplus required for a newly incorporated company under §884.054 and the amount of the company's capital and surplus on December 31, 2009;

(9) not later than December 31, 2018, have increased the amount of its capital and surplus by at least 90 percent of the difference between the amount of minimum capital and surplus required for a newly incorporated company under §884.054 and the amount of the company's capital and surplus on December 31, 2009; and

(10) not later than December 31, 2019, have at least the minimum amount of capital and surplus required under §884.054 for a newly incorporated company.

Source Note: The provisions of this §7.404 adopted to be effective December 12, 2010, 35 TexReg 10961